Petty v. Corcoran Gallery of Art

• Decision Date: 20 August 2020
• Docket Number: B293796
• Court: California Court of Appeals Court of Appeals
• Parties: SUSANNE JILL PETTY, TRUSTEE, Plaintiff and Respondent, v. THE CORCORAN GALLERY OF ART, et al., Defendants and Appellants.

SUSANNE JILL PETTY, TRUSTEE, Plaintiff and Respondent, v. THE CORCORAN GALLERY OF ART, et al., Defendants and Appellants.

B293796

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION SEVEN

August 20, 2020

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County Super. Ct. No. 18STPB03226)

APPEAL from a judgment of the Superior Court of Los Angeles County, Daniel Juarez, Judge. Affirmed.

Sheppard, Mullin, Richter & Hampton LLP, James M. Burgess, Karin Dougan Vogel, and Julie A. Bauman for Plaintiff and Respondent.

Paul Hastings LLP, Valerie Marek, and Kamila LaBerge for Defendants and Appellants.

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INTRODUCTION

The Corcoran Gallery of Art and the Trustees of the Corcoran Gallery of Art appeal from a judgment granting Susanne Jill Petty's petition requiring Corcoran to return artwork and a cash gift to the Alice C. Tyler Art Trust. Corcoran argues that, because it did not generally appear in this action, the probate court lacked jurisdiction and the judgment is void. Corcoran also asserts that the probate court erred in entering judgment because Petty failed to properly serve the petition; Petty untimely served its response to the probate court's notes; and the court failed to rule on Corcoran's motion for reconsideration. Corcoran also contends that a District of Columbia court order restricted its ability to comply with the probate court's judgment.

We conclude that the trial court properly entered judgment. By making a general appearance through a motion for reconsideration, Corcoran waived its objections to any defects in service or to lack of personal jurisdiction. Further, because Corcoran did not oppose the petition and only asserted its arguments in a defective motion for reconsideration, Corcoran forfeited those arguments. Even if Corcoran's arguments are considered, they lack merit. Therefore, we affirm the judgment.

FACTUAL AND PROCEDURAL HISTORY

A. Corcoran and the Tyler Trust

1. Corcoran

The Trustees of the Corcoran Gallery of Art is a nonprofit corporation that owns and operates the Corcoran Gallery of Art, a private art museum in the District of Columbia (collectively, Corcoran). In 1869, through a deed of trust, William WilsonCorcoran established the Corcoran as "'an institution in Washington City, to be 'dedicated to Art,' and used solely for the purpose of encouraging the American Genius, in the production and preservation of works pertaining to the 'Fine Arts,' and kindred objects.'" Several years later Corcoran established Corcoran College of Art & Design, devoted to the teaching of art and design. Corcoran College was integrated into Corcoran, becoming an accredited school of art and design.

2. Tyler Trust

In October 1974 Alice C. Tyler, a resident of Los Angeles, established a revocable trust to hold certain of her assets. In April 1988, pursuant to California law, Tyler revoked and amended certain provisions of this trust, renaming it the Alice C. Tyler Art Trust. The trust held over 100 works by artist Suzanne Regan Pascal (the Pascal collection)¹ and provided that, upon Tyler's death, the Pascal collection shall be transferred to a museum for exhibition. The trust's terms provided that the museum would receive a cash gift "to assist with the cost of securing and otherwise maintaining the collection . . . ."

According to the terms of the trust, the museum would receive the Pascal collection subject to specified conditions regarding its display. The trust's terms further provided that, should the museum, in the trustees' "sole discretion," fail to comply with these conditions, the trustees may terminate themuseum's rights in "any property" received, and the museum shall return "forthwith" all property to the trust.

3. Tyler Trust's Conditional Gift to Corcoran

After Tyler's death in 1993, pursuant to the terms of the trust and a written agreement, the trust transferred the Pascal collection to Corcoran. Based on the Tyler trust's requirements, as conditions of receiving the Pascal collection, Corcoran agreed to establish a permanent gallery known as the "Alice and John Tyler Gallery," display part of the Pascal collection at least two months each year, and keep at least one work from the Pascal collection in the Alice and John Tyler Gallery "at times when guest or other collections are on display." Under the agreement, Corcoran received $1 million in cash "to assist with the cost of securing and otherwise maintaining" the Pascal collection in its permanent gallery at Corcoran.

As also required by the Tyler trust, the agreement further provided that "[t]he determination from time to time of whether any or all of the conditions herein set forth have been fulfilled shall be made by and within the sole discretion of the [Tyler trust] Trustees. [¶] In the event the [Tyler trust] Trustees shall determine that [Corcoran] has not complied with the conditions set forth in this Agreement, the [Tyler trust] Trustees may terminate all rights of [Corcoran] in the [Pascal collection]" and Corcoran "shall return to the [Tyler trust] Trustees forthwith" the Pascal collection and the $1 million cash gift. The agreement further provided, in the event of termination, "All expenses of packaging, shipping, insurance, delivery and other expenses related to returning the work of art shall be borne by [Corcoran]."

The agreement prohibited Corcoran from selling the Pascal collection, and Corcoran agreed that "all rights for copies orderivative works remain with the artist and [Corcoran] agrees that nothing may be reproduced without the express permission of the artist." The agreement provided, "In the event of any suit or proceeding the prevailing party therein shall be entitled to recover its attorneys fees and other expenses." The agreement further stated that it "shall be governed by and construed in accordance with the laws of the State of California."

B. Corcoran Effectively Dissolves As an Independent Entity

1. Corcoran's Transfer Agreement with the National Gallery of Art

Corcoran honored the terms of the agreement with the Tyler trust for 20 years. After struggling financially for over a decade, Corcoran considered a potential acquisition by the National Gallery of Art, a quasi-governmental institution in the District of Columbia. Because of these financial difficulties, on May 15, 2014 Corcoran and the National Gallery executed an Art Accession and Custodial Transfer Agreement (transfer agreement).² Under the transfer agreement, Corcoran agreed to "transfer and deliver into the custody, care and possession" of the National Gallery the collection of "art works owned or controlled by the Corcoran." Corcoran's art works would "be held by [the National Gallery] for the benefit of Corcoran." Pursuant to the transfer agreement, the National Gallery had the right to decide which of Corcoran's artworks to accession³ into its art collection.

A related side letter dated June 19, 2014 directed that, oncethe National Gallery determined which of Corcoran's artworks it would and would not accession, after discussion with the National Gallery, Corcoran will distribute works not accessioned to museums or other institutions within the District of Columbia. However, Corcoran retained the right, after consultation with the National Gallery, to designate "a non-DC institution [as] the most suitable candidate for a particular work" without the work "first [being] offered to DC institutions." The side letter further provided that, before any artwork was distributed to an institution located outside of the District of Columbia, "either the Office of the Attorney General shall state in writing that it does not object, . . . or the proposed deaccessioning or distribution shall be subject to a further cy pres proceeding in the District of Columbia Superior Court." Finally, the transfer agreement obligated Corcoran and the National Gallery to "agree on an appropriate policy and program for distribution of [art works not accessioned by National Gallery] to other art museums . . . , which shall include appropriate provision for any then-existing liabilities, commitments and obligations relating to, associated with or arising from" these art works.⁴

2. Corcoran's Discussions with Tyler Trust

In July 2014 Corcoran's interim director, Peggy Loar, informed Susanne Jill Petty, a Tyler trust trustee,⁵ that"Corcoran is completing an agreement" with the National Gallery pursuant to which "[a]ll works owned or controlled by the Corcoran will go to [the National Gallery]." After stating that Corcoran "has honored the terms" of the Pascal agreement, Loar further advised that the Pascal collection "while controlled by the Corcoran [was] never accessioned and this provides some flexibility in how the works are now treated." Loar also told Petty that the National Gallery would not be accessioning the Pascal collection. Loar requested that Petty advise Corcoran whether "there are any museums or venues you are aware of that would be interested in the [Pascal collection]." Loar further stated that Corcoran would "only transfer the works if the receiving party agrees to any current or modified conditions. . . . If we cannot find any venue that will accept the current or modified conditions, then we would propose the most appropriate step would be to return the works to the family." Corcoran offered to "pack and ship [the Pascal collection] at [its] expense."

3. The District of Columbia Cy Pres Proceeding

On June 17, 2014 Corcoran filed a cy pres proceeding in the District of Columbia Superior Court to obtain approval of its proposed transaction with National Gallery and George Washington University's proposal...